SK Telekom has offered a share swap program worth around $627 million in an attempt to buy the remaining 49.4% stake that it doesn’t hold in SK Broadband. The deal would see SKT offer 2.47 million treasury shares in exchange for all of the SKB shares it doesn’t hold – some 146.3 million shares.
Due to take place on June 9th, pending board review, the deal will see SKT absorb the triple-play offerings that SKB provides to 4.8 million broadband customers, 5.8 million mobile IPTV customers (a service provided by SKT) and 3 million IPTV customers – as of the end of 2014. For the year, SKB posted revenues of $2.41 billion, as the second largest fixed-line provider in South Korea.
SKT originally bought into SKB in 2008, back when it was called Hanarotelecom. Both SKB and SKT are affiliates of SK Group, which will provide the Group with the country’s largest mobile operator and the second-largest ISP.
“By acquiring the 100% share in SK Broadband, we seek to optimize management efficiency and generate synergy, while boosting our corporate value. SK Telecom and SK Broadband will establish a full parent-child relationship, and bolster competitiveness for future growth.”
SKT’s 2014 results posted revenues up 3.4%, with 16.7 million LTE subscribers – a 58% market share according to the company. It said net income was up 11.8% year on year, and that it is aiming to hit 7 million IPTV subs. If the brands are merged, it should allow SKT to reduce churn, competing against Korea Telecom Freetel (KTF) and LG Telecom.